Abstract
The main institutions of the healthcare system were already in place, when the social market economy was introduced in Germany in 1948. The founders of the social market economy took over a system of statutory health insurance next to private health insurances, an early corporatist healthcare system, as well as a state system of public health.
In order to meet the most pressing needs of the time, the politicians of the early social market economy put emphasis on building hospitals and on increasing the number of physicians. Later on, the stability of the system of statutory health insurance became the main concern, and cost-containment policies were introduced. In 2019, with the emergence and spreading of the coronavirus disease (COVID-19), public health problems came to the forefront and required cooperative efforts within the social market economy.
In this chapter, an analysis is provided of selected healthcare policies from the early days of the social market economy to the modern times. A modified version of the concept of Economic Style by Spiethoff is used in order to highlight multiple facets and changes of policies.
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Notes
- 1.
According to Spiethoff, the concept of Economic Style has first been introduced by Sombart as a tool of economic analysis (Spiethoff 1933, pp. 51–84).
- 2.
The original German quote reads as follows: “Die Mode des wissenschaftlichen Beirats bei einem Bundesministerium hatte eigentlich Ludwig Erhard kreiert. Er hatte das Bedürfnis, mit seinem Freund und späteren Staatssekretär Müller-Armack und einem weiteren Kreis wirtschaftswissenschaftlicher Professoren seine aktuelle Politik zu diskutieren, für die Müller-Armack den zugkräftigen Namen” “soziale Marktwirtschaft gefunden hatte (Schmölders 1988, p. 125).
- 3.
The British concept of the welfare state goes back to a government report published by William H. Beveridge, in 1942, “Social Insurance and Allied Services.” Major features of the Beveridge system are the National Health Service, which is tax financed, and provision of healthcare for free to all citizens.
- 4.
As an application of Economic Style, Spiethoff mainly had the long-run analysis in mind, while Eucken also suggested a horizontal application (Eucken 1950, 38).
- 5.
Once a monopoly has been established, the external pressure to keep costs low is weakened, and rent-seeking may occur (Tullock 1967, 224–232).
- 6.
The seminal work by Arrow appeared in 1963. Arrow showed how the institutional environment of medical care influences the behavior of individuals. For instance, under the assumption that healthcare providers maximize their own utility, a fee-for-service remuneration provides an incentive to maximizing the number of services (Arrow 1963, 941–73).
- 7.
In an international comparison of OECD countries, Germany takes place 4 with 4.5 practicing physicians per 1000 inhabitants, but the numbers do not reflect regional distribution, and areas with a low population density are underserved (OECD 2022).
- 8.
“According to SGB V, in relation to the specific commission the Institute determines the methods and criteria for the preparation of health economic evaluations (HEEs) on the basis of the international standards of evidence-based medicine and health economics recognized by the respective experts in these fields. For each HEE, decisions must be made, among other things, on the perspective, the time horizon, the choice of comparators, the underlying care pathway, the model, the data basis, and the presentation of uncertainty” (IQWiG 2020 92).
- 9.
This reads in the original: “Die privaten Unternehmer helfen so mit, eine große und immer wachsende Anzahl von Arbeitskräften zu mobilisieren, sie tragen damit vielfältig zu einem Prozeß bei, der für die Entwicklung einer aktiven und gedeihenden Wirtschaft unerlässlich ist“(p. 374).
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Backhaus, U. (2023). Healthcare Policies of the German Federal Republic. In: Backhaus, J.G., Chaloupek, G., Frambach, H.A. (eds) Origins and Change of the Social Market Economy. The European Heritage in Economics and the Social Sciences, vol 26. Springer, Cham. https://doi.org/10.1007/978-3-031-39210-8_10
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